What is Token
Tokens are used in the cryptocurrency world for different reasons. On one hand, tokens can be utility tokens. Utility tokens allow their holders to use a crypto project’s products and services. They could be used within a crypto project’s ecosystem. Sometimes, utility token owners could get discounts or cashbacks on platform fees.
Tokens can also be security tokens. Security tokens are more strictly regulated compared to utility tokens. They represent ownership in external assets outside the blockchain such as a vehicle or a company’s shares.
Moreover, tokens could be categorized as fungible or non-fungible. Fungible tokens are identical to each other and used interchangeably such as the Bitcoin cryptocurrencies. Non-fungible tokens (NFTs) are unique. Each non-fungible token is a representation of a digital or physical asset. NFTs are becoming increasingly popular in the art world. Ownership of an NFT means ownership of the respective asset that has been tokenized.